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Economics Education Brightens Up

Even amidst a gloomy economy, the use of online learning tools can keep the "dismal science" from living up to its name.

By Sara Stroud

02/11/11

It has been more than 160 years since British historian Thomas Carlyle dubbed economics the "dismal science." Given the dreary state of things today, you probably won't find many arguments to the contrary.

One effect of the current bleak economic climate has been an increasing stress on the importance of teaching the fundamentals of finance to K-12 students. But the financial literacy education we have now is a long way from learning to balance a checkbook in home economics class.

While teaching economics still includes the basics of personal money matters, it's also now about preparing students to take part in the complex global economy. Educators are turning to a host of interactive educational tools to help students demystify the world of finance. Through the use of online learning modules, games, and simulations, students are finding that acquiring economic savvy doesn't have to be a dismal process at all.

"Anecdotally, what we know is that programs and tools that engage kids and give them the opportunity to apply what they've learned seem to be the most effective," Levine says.

JumpStart hosts a national educator conference each year and maintains a clearinghouse of more than 800 staff-reviewed financial education resources, many of which are free or low-cost. The coalition has also developed academic standards that lay out a path to economic literacy through high school. The standards identify what students should know in different areas of personal finance, such as credit and debt, saving and investing, and insurance. Students need to learn about jobs, entrepreneurship, insurance, and credit -- in short, how to earn money, protect it, and make it work for them.

"We have always taken the approach that financial literacy is a multifaceted knowledge," Levine says. "We think financial education can't be taught as isolated topics."

If anything has highlighted the need for financial literacy education, it's the Great Recession, which officially ended in mid-2009 but whose aftereffects continue to wallop the US economy. The hope is that a more financially knowledgeable population could help avert a return of the skyrocketing consumer debt and collapse of the housing market that were brought on in part by the poor purchasing decisions made by consumers.

"There's a great need to teach financial literacy to students," says Timm Boettcher, president of education technology developer Realityworks, the maker of TimeMAPS (Time Management for Achieving Personal Success), a software-based financial literacy curriculum. "They're coming out of school without the tools to make thoughtful economic decisions."

That's something Sallie Lawrence has seen firsthand as the career development coordinator for Birmingham City Schools in Alabama, a state with one of the highest bankruptcy rates in the nation, according to the National Bankruptcy Research Center. "Students were entering college in debt," Lawrence says. "We saw that there was a need to prepare students before they left us." So the district began offering a financial literacy course with the help of TimeMAPS software three years ago.

The software offers about 50 lessons, which, Lawrence says, "get down to the financial nitty-gritty," including mortgages, investing, and taxes. Also included is a "life simulator," through which students can experiment with making different financial decisions, such as choosing a career, finding a place to live, and saving for retirement. Boettcher says a new version of the program is released each August, and updates are sent out to reflect current economic data, such as unemployment rates and housing costs.

So far the software is bearing benefits. In 2009-2010, the program's second year of use by Birmingham City Schools, testing at the beginning and end of the spring semester showed a 20 percent gain in students' knowledge of finance, Lawrence says.

For now, the financial literacy course is an elective, taught primarily to 11th-graders, though Lawrence says there is an effort within the district to make the class a graduation requirement for all students. The district is also using some of the more basic elements of the software in middle schools.

"We're hoping to see the benefit of teaching it earlier," Lawrence says.

TimeMAPS tailors its lessons to meet varying state financial literacy standards. About two dozen states currently have such requirements. Some mandate that courses be devoted solely to financial literacy education, while others require curriculum to be incorporated into other subjects. Other states have requirements in the works, Levine says. In the meantime, she stresses that the absence of statewide financial literacy standards doesn't mean the topic isn't being taught.

In the state of Washington, one online provider is bringing economics education to high school students with an eye toward preparing the entrepreneurs of the future. With a focus on computer science, digital arts, and business, Giant Campus is an online high school that students can attend full-time, or part-time as a supplement to their regular high school curriculum.

Bernanke: Students Need Financial Smarts

After the results of a recent survey by the JumpStart Coalition for Personal Financial Literacy showed that graduating high school seniors struggle with financial literacy basics, US Federal Reserve Chairman Ben Bernanke released a statement that expressed support for forceful economics instruction for K-12 students:

"We are reminded of how critically important it is for individuals to become financially literate at an early age," Bernanke said, "so that they are better prepared to make decisions and navigate an increasingly complex financial marketplace."

The school tackles financial literacy through classes in entrepreneurship and marketing. The courses establish an understanding of economic basics, like supply and demand, then move on to more complex topics, like taxation, accounting, and risk management, Giant Campus Vice President James Peters says.

Students log in to their courses online to access material, submit assignments, take tests, and attend a weekly webinar-style class meeting. That interaction is key to keeping students engaged, says Lori Jacobs, who teaches Giant Campus' entrepreneurship and marketing courses. Jacobs also teaches business and marketing at Auburn High School in Washington.

"They need some sort of interactive activity to keep them motivated when learning online," Jacobs says. To that end, Giant Campus also formed the first online chapter of DECA (Distributive Education Clubs of America), an organization that prepares students for careers in marketing and finance. Through the program, Giant Campus students operate an online store and interact with students from other schools both online and in person. They also compete against students from other DECA chapters around the country in things like running virtual businesses, conceiving of innovative business ideas, and creating marketing strategies for businesses in their communities.

Shmoop is another maker of technology tools meant to help students bolster their financial savvy. The company makes online learning guides on a range of subjects, including economics. The guides, written mostly by doctoral students, can be accessed online, as e-books, or through smartphone applications. "It has never been more important for students to understand economic literacy," says the company's president, Ellen Siminoff.

Shmoop offers about 10 different online economics lessons on topics such as economic systems, taxes, corporations and stocks, and international trade. Each of the lessons features an overview, analysis, key terms, and a game to help students practice what they've learned. For example, in the money and banking module, students take on the role of the chairman of the Federal Reserve and must rescue the nation's economy from inflation and stagnant growth.

The lessons are free and are generally being used by teachers as resources to supplement classroom activities, Siminoff says. The company is at work developing an additional economics curriculum that districts will be able to purchase either through a licensing agreement or as a series of low-cost teacher guides.

Shmoop tries to put economics in terms that make sense to students, Siminoff says. For example, each lesson ends with a feature called "Sometimes a Song Says It Better," tying a YouTube video of a popular song to the lesson topic, whether it be supply and demand, labor and wages, or taxes and debt.

"So many of these topics," Simonoff says, "are so relevant to students."

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